The table below shows the number of labor hours required to produce one umbrella and one bushel of corn in the United Kingdom and the rest of the world. If the United Kingdom and the rest of the world begin to trade with each other, the international price of umbrellas will lie between ________ and Labor hours to make:In the United KingdomIn the Rest of the World1 umbrella3.002.001 bushel of corn1.000.25
A. three bushels of corn per umbrella; eight bushels of corn per umbrella.
B. 1/3 of a bushel of corn per umbrella; three bushels of corn per umbrella.
C. 1/8 of a bushel of corn per umbrella; 1/3 of a bushel of corn per umbrella.
D. 1/8 of a bushel of corn per umbrella; eight bushels of corn per umbrella.
Answer: A
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A) saving would equal depreciation at e1. B) the economy would grow until it reached e2. C) capital stock would increase until the economy reached K2. D) all of the above.
If economies of scale allow one cable TV firm to supply the entire market at the lowest possible cost, then this company is
A) a natural monopoly. B) not a monopoly. C) a monopoly, but not a natural monopoly. D) a legal monopoly.
Assume consumers eat either rice or pasta for dinner every night. If the price of rice increases, then one would expect to see:
A. a decrease in the demand for pasta. B. an increase in the quantity of pasta demanded. C. an increase in the demand for pasta. D. a decrease in the quantity of pasta demanded.
How much is the marginal propensity to save when disposable income rises from $3 trillion to $4 trillion?
A. 0
B. .25
C. .5
D. .75